Interaction between CASA and Recreational Aviation Administration Organisations

1. Interaction between CASA and Recreational Aviation Administration Organisations Jim CoyneManager Future Technology and Sport Aviation

2. National Aviation Policy – White Paper (1) • Over the past decade, special legislative arrangements have been introduced for the design, manufacture and airworthiness of aircraft that are not required to meet formal CASA standards. These sorts of aircraft are mainly used for sport and other recreational purposes. As part of this transition CASA has registered some of the organisations involved in these activities to administer safety requirements themselves under CASA oversight. To be registered, the organisations must satisfy CASA that they have sufficient qualified personnel to perform this responsibility.

3. National Aviation Policy – White Paper (2) • To improve the sport and recreational sector’s capacity to self-administer, CASA will be introducing a strategic framework that ensures the sector does not expose non-participants in the community to unacceptable risks. A Sports Aviation Office will be created to oversee the sector, and a safety forum introduced to assist information exchange within the sector itself, and between it and the safety regulator.

4. CASA Direction • The reference to Sport Aviation in the White Paper is significant. As you are no doubt aware, the Director of Aviation Safety, John McCormick, is a strong supporter of sport aviation and the White Paper reflects his views and the direction he has set for the sport aviation sector. I believe that this now sets the scene for a positive step forward.

5. Pre White Paper • In the past, oversight of sport aviation activities was fragmented and did not have clearly defined areas of responsibility. Oversight was spread across the Regulatory Implementation, General Aviation Operations, and Airworthiness Engineering Groups. Most of these groups have only limited knowledge of the regulatory framework under which these aircraft operate. The White paper has now put an end to this piecemeal approach and laid out the path ahead.

6. Post White Paper • The White Paper requires CASA to introduce a strategic framework that ensures that the sport and recreational sector does not expose non-participants in the community to unacceptable risks. As a result, CASA has implemented a Sport Aviation Office within the Future Technology and Sport Aviation Branch to oversee the sector and a Sport Aviation Safety Forum has been introduced to assist information exchange within the sector itself, and between it and CASA.

7. Purpose of Presentation • This Presentation will discuss: • The Strategic framework and policy as outlined by the White Paper, • Outline the relationship between CASA, the RAAOs and Aerosafe. • Explain the Self Administration funding model and how funds are distributed to RAAOs. • Provide a basic outline of Board responsibilities to CASA.

8. Strategic Framework and Policy • The policy objectives are: • To establish an oversight structure that will ensure that the activities undertaken by the sport aviation industry do not put at risk lives or property of non-participants. • Not inhibit growth through unnecessary bureaucratic control.

9. Regulation • CAR 1988 was not intended to regulate this class of aircraft or activities. Currently, RAAOs oversighting these activities do so under exemptions and delegations from compliance with current regulations. While this is not a satisfactory way of regulating this segment of the aviation industry, it will remain in force until suitable regulations in the form of Part 149 are introduced.

10. Strategy • To achieve the objectives outlined in the White Paper, three approaches are being employed to form a strategy that focuses on the sport aviation industry’s evolving needs: - Deeds of Agreement, - Appropriate oversight, and - Engagement with industry.

11. Deeds of Agreement • These are private law (contract law) as opposed to public law (regulations). While this imposes limitations on the effectiveness of implementing public policy, there is a strong will within the sport aviation sector to make it work

12. Appropriate Oversight • A Sport Aviation Office has been established within the Future Technology and Sport Aviation Branch. This Office is the central point of contact for industry, the general public, other jurisdictions and other areas of CASA on all matters pertaining to sport and recreational aviation. The Office is staffed with appropriately trained staff who have the necessary skills and experience to understand the underlying philosophy of sport aviation and are able to work with this sector of the industry.

13. Engagement • In conjunction with the Deeds an appropriate safety assurance regime has been established that engages the RAAOs through a number of elements used in parallel: • Ongoing Functional and Systems Surveillance by CASA – Functional audits are used to assess specific technical areas, while the Systems audits focus on how the RAAO is performing against their operations manual (corporate audit) and their business practices (governance audit). • Establishment of Sport Aviation Safety Forum – Used to develop and promote inter-organisational face to face communication. Chaired by John McCormick, which demonstrates his strong commitment. • Reporting – The Deed requires RAAOs to report to CASA on the schedule of functions in the Deed and the appropriate use of the funding provided by CASA. • Aviation Safety Network – The Network provides a program for governance, risk management and safety to assist RAAOs in implementing their risk reduction strategies. The Network works with members to deliver their individual requirements and also facilitates networking with other like organisations.

14. CASA/RAAO/Aerosafe’s Relationships • While CASA retains overall responsibility for the standards and their safe application, oversighting the day-to-day operation of RAAO controlled activities is the responsibility of the relevant RAAO. The Sport Aviation Office oversights the RAAOs administration of their sectors and financially assists these organisations via Deeds of Agreement. • Following the inquest into the aircraft crash near Willowbank in January 2006, where a light aircraft transporting skydivers crashed shortly after take off killing five of the seven people on board (the pilot and four jumpers), CASA commissioned Aerosafe Risk Management to conduct a safety and risk management analysis of the parachute industry. The outcome of this analysis provided valuable information on the methodology of managing safety risk within this activity. This information was subsequently tailored and adopted for all the RAAOs and resulted in the Industry Risk Profiles and Deeds of Agreement.

15. Aerosafe’s Role • Aerosafe Risk Management specialises in the provision of safety and risk management services to the Aviation industry. In the Sport Aviation sector they assist CASA to develop, implement and enhance safety and risk management processes in order to minimise risk and to maximise opportunity. • The Aviation Safety Network ( ASN) is facilitated by Aerosafe Risk Management to support the establishment of best practice safety and risk management programs. The ASN was established as a support network for aviation organisations aiming to develop and sustain a positive safety culture, working with other providers in the industry to develop a consistent approach to safety and risk management. • Aerosafe also conducts risk and safety training in such areas as risk management and Safety management systems with the aim of providing skills and competencies to the aviation industry.

16. Self Administration Funding

17. Self Administration Model • There are a number of foci that can form the basis of a self administration model – risk, value, cost or confidence. A self administration model based on the provision of confidence was determined as the best option. This provides an outcome that is value for money to the Government while providing safety assurance to CASA, the Government and the community at large. • Confidence is required by CASA on the capability (competence) and conduct (willingness) of the RAAOs delivery of standards, enforcement, surveillance, education and its ability to provide assurance

18. Distribution of Funds to RAAOs • In line with the confidence based self administration model, RAAOs are funded on the basis that they provide CASA assurance that they are capable and willing (competence and conduct) to meet their responsibilities and provide an environment to allow the current exemptions to continue in operation. This occurs through the provision of data and information that gives CASA confidence in the RAAOs administration and thus safety assurance. This model sets responsibility, measures performance quality and allows for improvement of the sector through implementation of risk treatment strategies. • This approach also provides flexibility within the funding model to allow the disbursement of funds to address risk issues or meet assurance needs as required by CASA. There are a range of payment types that provide RAAOs with a total funding amount as outlined on the next few slides:

19. Deed of Agreement • Fixed Fee – RAAOs will be paid a fixed fee annually at the start of each Deed period. This is predicated on the agreed outcomes being met in the Deed period. If the specified outcomes are not met, funds are required to be recovered and an amount will be adjusted from the following year’s funding. • Risk treatment strategies – Additional funding to implement identified risk treatment activities agreed with CASA as a result of the sport aviation industry risk analysis. The amount provided will vary depending on the risk and complexity ratings and the activity undertaken. Expenditure will still require acquittal and audit certification.

20. Additional Payments • Grants and sponsorship – Grants for dedicated projects or initiatives may also be provided by CASA on application. This may apply for CASA sponsorship of sport aviation activities or events. The amount available will vary depending on the risk and complexity ratings and the activity undertaken. Expenditure will still require acquittal and audit certification

21. Board Responsibilities to CASA

22. Responsibilities – As Outlined in RA-Aus Operations Manual • Corporate Governance • Strategic Direction • Financial Responsibility • Appoint the Director-Self Administration • Appoint Internal Governance Committee • Appoint Technical Advisory Committee • Appoint Other Technical or Operational Committees • Conduct of internal Audits

23. Corporate Governance • The Board is responsible for endorsing the organisation's strategy, developing directional policy, appointing senior executives and ensuring accountability of the organisation. • The Board should actively participate in the overall planning process and provide guidance and assistance in implementing the plan’s goals.

24. Strategic Direction • It is the Board’s role to describe the organisations vision, set its values and ethical guidelines and to determine its long term goals. The Board should establish the organisations direction and strategies for the future. • The Board is the guardian of the organisation’s vision and values (i.e. it is the What, Where, How and Why). What it plans to achieve, where it wants to be, how it plans to get there and why it is where it is. Its prime role, in fact, is to keep the vision alive by taking a leading role in planning for the future of the organisation. The Board must be able to stand back and take a strategic, professional view of potential future directions.

25. Financial Responsibility • The Board is responsible for ensuring that the organisation meets all its legal requirements and remains accountable to its stakeholders, including the Government. Further, the Board needs to make sure that the organisation acts according to its stated mission. The Board must understand how and why funds have been allocated to it by CASA and be committed to the organisation carrying out the functions agreed to in the Deed of Agreement. Board members need to develop a broad understanding of the organisation’s programs and priorities as an essential component of their duty of care. • The Board has a responsibility to the Government, CASA and the community at large for ethical and wise financial management. All transactions should be transparent and consistent. Further, the Board is responsible for financial reporting on expenditure of CASA funds.

26. Appointments • Once the organisation’s vision and values have been set, the Board must appoint the person to lead the fullfilment of these goals. The day-to-day administration of the organisation is the responsibility of the Chief Executive Officer, who functions in accordance with the directions issued by the Executive Members of the Board. In the most productive situations, the Board should work closely with its appointed CEO to further the organisation’s goals and to broaden its financial and membership support base. Together they regularly review the organisation’s overall mission and program goals and decide on a regular evaluation process for all programs to monitor program effectiveness. • The Board also appoints a number of committees to deal with specific organisational issues.

27. Risk management is a very important part of a Board’s role and relates to how an organisation sets objectives, then identifies, analyses, and responds to those risks that could potentially impact its ability to realise its objectives. The Board must look at all activities undertaken by the organisation with a critical eye to ensure that risks are minimised and appropriate insurance policies are taken out in case things go wrong. The specification and implementation of the Risk reduction plan is outlined in the Deed of Agreement. The organisation Industry Risk Profile should be monitored by the Board. The true value of an industry level risk profile is not gained until an action plan is derived and committed. Internal auditing requires the continuous monitoring to evaluate the effectiveness of the organisation’s Risk management processes. Internal auditing is considered one of the “four pillars” of corporate governance, the other three pillars being the Board, management, and the external auditor (CASA). Conduct Internal Audits

28. Conclusion • The White Paper’s the future direction of Sport Aviation • Dedicated Sport Aviation Office. • CASA, the RAAOs and Aerosafe relationship. • Funding Model. • Board responsibilities with CASA.

29. Questions ??